The government has recently announced massive cuts for universities in the years to come, to which the Russell Group of elite universities has reacted with predictable horror. Ministers and those close to them have already strongly signalled a coming rise in tuition fees. While academics are terrified by the threat of redundancies and pay cuts, commentators are rightly worried that cuts and fee-rises will threaten the project of opening up university education to a wider section of the public.

But let's be clear: the government's "expansion" agenda in universities has never been the wholly egalitarian policy that such sympathetic commentators would have liked to believe in. As the years go by, the experience of university offered to large numbers of students bears less and less resemblance to anything that most middle-class people would recognise as higher education.

The gradual erosion of student grants and benefit entitlements over the years, and the relatively meagre sums on offer through the students loans and bursaries schemes, has led to large numbers of students being forced to undertake over 20 hours per week of paid employment just to make ends meet during term time, and to work full-time during the "holidays". Struggling to complete full-time degree programmes under these circumstances, such students are at best exhausted and overworked, at worst completely unable to engage properly with their courses. The great, undiscussed social divide in British universities is between those students who have parents able to subsidise their living costs to leave them time to study, and the growing number who do not.

At the same time, pressure from government to transform university programmes outside elite institutions into vocational training programmes, and the anxiety students themselves suffer about exactly what they are supposed to get out of their struggle to learn under such trying circumstances, frequently combine to create an atmosphere of febrile anxiety in which "employability" becomes the sole goal of higher education. If this tendency is not checked, then the resulting situation will be dire: a con-trick perpetrated on students, parents and the public whereby what is offered under the guise of "university education" is nothing more than a new form of tertiary vocational training for the service, retail and media industries, while real university education is reserved for a privileged elite. Academics and students in non-elite institutions make heroic efforts every day to resist this trend, working to defend and make possible a real experience of critical, substantial, research-led education. But it gets harder for us every year.

The reasons are not hard to discern. New Labour has always been driven by a rejection of the old social democratic dream of equality of access to excellent public services, in favour of the drive to turn us all into competitive, entrepreneurial consumers from as young an age as possible, and to lavishly reward those who can play this role most successfully. This imperative meets little resistance among the wider public when it comes into contact with universities policy, because elitist attitudes to higher education run deep in British middle-class culture.

It's a notable feature of our public life that even those who fiercely defend the principle of comprehensive education in secondary schools never question the assumption that universities should be organised according to a rigid hierarchy. But what is the logic of this assumption? According to what principle of efficiency or fairness should the most able and the wealthiest students also be the ones with the access to the best resources? How would the public respond if we were explicitly to offer top-class healthcare only to the fittest, healthiest and richest members of the population? Of course, the trouble is that offering the kind of quality education that many believe should be available to all students would be colossally expensive. Most problematically, it would require that students themselves – not just universities – received more, not less, funding than they currently do.

When Lord Browne reports after the next election, he is widely expected to recommend a large increase in tuition fees. It will be very tempting for academics and the wider public simply to accept the argument that universities can be improved if students are forced to shell out up to £10,000 a year for their tuition. Academics will be promised that at least some of our jobs, research and salaries will be protected by this "windfall", while students will be promised a marginally improved experience of university life.

Whether any of these proposals will really address the pressing problem of financial support for students is left to be seen. Short of a workers' revolution, it's very hard to imagine circumstances under which the left's old dream – a return to 1970s levels of support for today's greatly expanded student population – could become politically feasible, such would be the massive tax-rises that it would require. Social democrats have long advocated a specific tax on British graduates in order to fund an increase in support for students and universities. The most realistic approach would be simply to expand the loan scheme, massively. Let students borrow £60,000 to pay for fees and to live on, paying it back at low interest over the course of their working lives: then at least they will have the opportunity actually to be students during their time at university.

Of course, a direct graduate tax funding full bursaries would be fairer, but then so would nationalising the banks and the railways and using their profits to fund the health and education systems (as for a workers' revolution: I'm up for it if you are). But whatever proposal for university funding does emerge, it is important that academics, journalists and the sympathetic public do not simply accept that the status quo – tweaked just enough to squeeze some more cash out of students, but not enough to transform their experience of university – is acceptable.